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 Money to invest ....?
If you had $350 a month to invest what would you invest in?...


 I want the basic knowledge about shares?
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I'm asking this right after the defeat, at 3pm edt
Additional Details
I meant totally crash, as in so far so fast that they have to close them early today. It's looking like ...


 Do you believe in the devil?
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jasongrad@sbcglobal....
How does shorting a stock drive down the stock's price?
                     
 




qwerty
Rating
market theory suggests shorting a stock (selling a stock not owned with the expectation it can be purchased in the future at a price lower than for which it was sold) in substantial enough quantities creates a temporary imbalance in the supply/demand equilibrium, requiring a lower price to attract buyers to return the stock to a new, but lower s/d equilibrium price. This is a short run phenomenon for liquid stocks. It should be noted that stocks with substantial uncovered open short interest are actually less resistant to price drops.


trade_info
it does not always drive the price down. it will drive the price down with a concerted effort by a major short seller or a group of sellers who relentlessly sell to drive the price down. they usually try to time that with bad news from the company or unfavorable articles about the company. if you or i went out and shorted a 1000 shares of xyz, it would not have much effect.


muncie birder
Rating
Actually, shorting a stock can drive the price up in certain circumstances. A person who shorts a stock has borrowed the shares and sold them. If the short interst in a stock becomes very great, something known a a short squeeze can take place. What happens is that it will become known that there is a very large short interest in a particular stock and speculators will start buying up the shares and begin driving the price up to make the shorts squirm. The shorts will then try to cover their positions, because they are loosing money, and they will drive the price up further. There have been cases in the past where the shorts could not cover their positions. The most notable example being in 1920 when members of the NYSE, shorted Stutz Motor Car. Ryan, who controlled the company, bought up all the outstanding stock. The shorts could not cover their positions because no stock was available. The NYSE, being a tight club, even as it is today did not want its members to suffer the indignity of having to come to terms with Ryan, who was not a member, halted trading in Stutz Motor Car and bankrupted Ryan.

That is one of the disadvantages to trading on the NYSE. The members are given all the advantages and the public be damned.


Gojurokusai
One person doing it won't drive down a stock's price. Many people doing it at the same time could, but most likely only tempoarily. How many transactions are needed at the same time to accomplish this feat is based on how many shares of the company are available or owned by the public.

When a person short's a stock, that person's broker borrows someone else's stock and sells it on your behalf. Later you are responsible for replacing it (hopefully purchasing it at a cheaper price). So shorting a stock has the same effect as someone selling the stock, because that's what's happening.


wasdadd
When a stock is shorted, it is sold. Sales of a stock drive the price down. It is just that simple.


michaelsgdec
Rating
a short is still a sell, and selling a lot of stock depresses the price.


summa_corda
Rating
When you short a stock, you are borrowing the stock and then selling it on the market. This increases the supply of stock being sold. As with any other supply-demand equation, an increase in supply will drive down prices by shifting the supply curve. This is the same mechanism that affect prices for good and services (think of how prices for vegetables drop in the summer when there is plenty of supply in the market).


Scot1and
Rating
shorting is simply selling of the stock. If done right you pick a moment where your selling will trigger the longs to start selling as well. (Selling on a break of a 50 DMA or shorting with the stochastics are very overbought.)

But remember, shorting a stock affects the stock the same as someone who has held the stock for years and sells the shares. If I'm long i don't mind the shorts (they must be buyers at some point).


h8mongrel
Shorters prey on Jim Cramer's picks, because pretty much all his stock picks go up after he picks them in the after hours trading and the shorters are there waiting to sell the next morning.


rahul
No..Shorting or buying doesn't drive the price.Shorting or longing is your desicion on the basis of where the stock price will go. If you think the share price will go up, then you buy it and you short if you thinkk price will go down. I would suggest you go through few manuals or free articles available at lot of sites.


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